“Demographic Trends and Competitiveness are Inextricably Linked”

Robert Bosch Stiftung presents studies on the challenge of demographic change in Baden-Württemberg

Stuttgart – 22 November 2007 – At the foundation’s joint conference in Stuttgart with the State Chancellery of Baden-Württemberg “Baden-Württemberg as a Business Location: Demography and Competitiveness,” Robert Bosch Stiftung will present the following two studies: “Baden-Württemberg as a Business Location: Demography and Competitiveness” – a study carried out by Roland Berger Strategy Consultants and commissioned by Robert Bosch Stiftung, and the study of the State Statistics Office of Baden-Württemberg and also supported by the Robert Bosch Stiftung entitled “Demographic Change in Baden-Württemberg – Effects and Challenges for Society and Policymakers.” Member of the Management Board of Robert Bosch Stiftung, Dr. Ingrid Hamm, comments the work as follows:

“These two studies are our contribution to meeting the challenge of demographic change in Baden-Württemberg. Robert Bosch Stiftung has developed pioneering proposals for dealing with demographic change since 2004, when the Commission for the Family and Demographic Change was established under the chairmanship of Prof. Dr. Kurt Biedenkopf. Now, for the first time, we have commissioned studies focusing on a single federal state. They will provide precise information on the opportunities and risks associated with demographic trends and present recommendations for action addressed to policymakers. Our main focus is on Baden-Württemberg as a business location, since demographic trends and competitiveness are intimately related. In statistical terms, this means:

• The state of Baden-Württemberg will lose one million inhabitants by the year 2050, which amounts to a decrease by 9.3 percent, from 10.7 million to 9.7 million. Baden-Württemberg will not only have fewer inhabitants, but will also have more senior citizens as a share of its population.
• The average age of the inhabitants of the state will rise from just under 42 years today to nearly 50 by 2050.
• The supply of labor will already begin to decline in 2015, and by the year 2030 will have decreased by 765,000 workers compared to 2006.
• The number of children of nursery school age is already falling today, while in schools almost one in four desks will be empty in 2025 compared to today.
• The below-average share of immigrants sitting their university qualifying school-leaving examination is alarming. It is only 3.8 percent in Baden-Württemberg, compared to an average of over 10 percent in Germany as a whole.

While Baden-Württemberg has managed to more than double its gross domestic product over the last three decades, this growth rate will be almost halved over the next forty years in the absence of decisive measures to strengthen the family and guarantee the sustainability of public budgets in the long term, and if employment is not increased in all age groups and among both sexes. Nonetheless, Baden-Württemberg is currently in a favorable position compared to the other federal states, but given its strong point of departure, it also has the most to lose economically. Five main levers for change were identified in the “Demographics and Competitiveness” study carried out by Roland Berger Strategy Consultants:

• Continue to increase labor market participation
• Raise birth rates and improve the situation of families
• Strengthen innovative potential
• Exploit the growth opportunities offered by the senior citizens market
• Consolidate the budget

We believe that these levers present good practice and hope that they will also be adopted by other federal states in Germany. We are also grateful to the State Statistics Office of Baden-Württemberg, which elaborated accurate figures in its study, which once again underline the absolute need for change.”